Yahoo TV

STORY: Florian Zimmermann's vast collection of classic cars is more than a hobby. It's an investment.

Location: Lindau, Germany

He started buying vintage cars when he worked at Mercedes-Benz

and has since built a collection of 300 vehicles.

"My last assignment within Mercedes was head of a classic center. And within this function of quarter head, I had to work a lot with classic cars and I had started at that time to collect my own cars."

Across the globe, billions of dollars are being spent annually on classic cars... in a wave of investment in this alternative asset.

In 2022, a Mercedes-Benz 300 SLR Uhlenhaut Coupé from 1955

was sold for a whopping 135 million euros, about $149 million, making it the world's most expensive car ever sold.

Vintage cars have risen 185% in value over the past decade,

outstripping luxury rivals such as wine, watches and art, ranking second only to rare whiskies.

That's according to Knight Frank's 2023 wealth report.

And the market is responding ...

expanding beyond a comparatively small community of collectors to include investors drawn by the prospect of high returns.

"So, besides the fun and the fun with the cars, it became also a serious investment for us and as you see behind me, quite a number of cars now within our collection, which we keep for the future."

But it's not a sector for the financially faint-hearted.

Zimmermann says running costs for car collections, including hefty storage and insurance fees,

could easily amount annually to 6% of the portfolio's value.

"So it's getting harder and harder to find the proper mechanics to keep these cars alive. And you have to spend quite an amount of money to keep all these cars in running condition."

Nonetheless, the classic car market is expanding as the number of wealthy people also rises.

Classic vehicle insurer Hagerty estimates there are about $80 billion collector vehicle transactions a year globally, including all auctions and private sales.

And while North America remains the largest market for auctions,

Zimmermann says a growing number of buyers have emerged in the Middle East, India and China in recent years.

And the global race to renounce combustion engine cars will only serve to heighten interest in these relics of a vanishing era.